Opinion
C. A. PB 12-5616
05-28-2014
RHODE ISLAND ECONOMIC DEVELOPMENT CORPORATION v. WELLS FARGO SECURITIES, LLC, ET AL.
Max Wistow, Esq. Counsel for Plaintiff Stephen P. Sheehan, Esq. Counsel for Plaintiff Benjamin G. Ledsham, Esq. Counsel for Plaintiff Robert M. Duffy, Esq. Counsel for Defendant Wells Fargo Securities, LLC Byron L. McMasters, Esq. Counsel for Defendant Wells Fargo Securities, LLC Thomas F. Holt, Jr., Esq. K & L Gates, LLP Counsel for Defendant Wells Fargo Securities, LLC Gerald J. Petros, Esq. Hinckley, Allen & Snyder LLP Counsel for First Southwest Company Mitchell R. Edwards, Esq. Hinckley, Allen & Snyder LLP Counsel for First Southwest Company Brian E. Robison, Esq. Gibson, Dunn & Crutcher LLP Counsel for Defendant First Southwest Company Russell H. Falconer, Esq. Gibson, Dunn & Crutcher LLP Counsel for Defendant First Southwest Company William M. Dolan, III, Esq. Brown Rudnick LLP Counsel for Defendants Robert Stolzman and Adler, Pollock & Sheehan, P.C. David P. Martland, Esq. Silva, Thomas, Martland & Offenberg, Ltd. Counsel for Defendant Keith Stokes David A. Grossbaum, Esq. Hinshaw & Culbertson LLP Counsel for Defendants Antonio Afonso, Jr. and Moses Afonso Ryan, Ltd. Samuel C. Bodurtha, Esq. Hinshaw & Culbertson LLP Counsel for Defendants Antonio Afonso, Jr. and Moses Afonso Ryan, Ltd. Matthew R. Watson, Esq. Hinshaw & Culbertson LLP Counsel for Defendants Antonio Afonso, Jr. and Moses Afonso Ryan, Ltd. Brooks R. Magratten, Esq. Pierce Atwood LLP Counsel for Defendant Barclays Capital, Inc. Jeffrey C. Schreck, Esq. Counsel for Defendants Richard Wester, Thomas Zaccagnino, Curt Schilling, and Jennifer MacLean Michael F. Connolly, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Counsel for Defendants Richard Wester and Thomas Zaccagnino Joseph P. Curtin, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Counsel for Defendants Richard Wester and Thomas Zaccagnino Counsel for Defendants Richard Wester and Thomas Zaccagnino Michael P. Duffy, Esq. Peabody & Arnold LLP Counsel for Defendant Starr Indemnity and Liability Co. Frederick E. Connelly, Jr., Esq. Peabody & Arnold LLP Counsel for Defendant Starr Indemnity and Liability Co. Christopher R. Conroy, Esq. Peabody & Arnold LLP Counsel for Defendant Starr Indemnity and Liability Co. Bruce W. Gladstone, Esq. Cameron & Mittleman LLP Counsel for Defendant J. Michael Saul Mark A. Berthiaume, Esq. Greenberg Traurig Counsel for Defendant Jennifer MacLean Jonathan Bell, Esq. Greenberg Traurig Counsel for Defendant Jennifer MacLean Timothy E. Maguire, Esq. Greenberg Traurig Counsel for Defendant Jennifer MacLean Carl E. Metzger, Esq. Goodwin Procter LLP Counsel for Defendant Curt Schilling Sarah Heaton Concannon, Esq. Goodwin Procter LLP Counsel for Defendant Curt Schilling Josh L. Launer, Esq. Goodwin Procter LLP Counsel for Defendant Curt Schilling Thomas E. Duncombe, Esq. Goodwin Procter LLP Counsel for Defendant Curt Schilling
Providence County Superior Court
Max Wistow, Esq. Counsel for Plaintiff
Stephen P. Sheehan, Esq. Counsel for Plaintiff
Benjamin G. Ledsham, Esq. Counsel for Plaintiff
Robert M. Duffy, Esq. Counsel for Defendant Wells Fargo Securities, LLC
Byron L. McMasters, Esq. Counsel for Defendant Wells Fargo Securities, LLC
Thomas F. Holt, Jr., Esq. K & L Gates, LLP Counsel for Defendant Wells Fargo Securities, LLC
Gerald J. Petros, Esq. Hinckley, Allen & Snyder LLP Counsel for First Southwest Company
Mitchell R. Edwards, Esq. Hinckley, Allen & Snyder LLP Counsel for First Southwest Company
Brian E. Robison, Esq. Gibson, Dunn & Crutcher LLP Counsel for Defendant First Southwest Company
Russell H. Falconer, Esq. Gibson, Dunn & Crutcher LLP Counsel for Defendant First Southwest Company
William M. Dolan, III, Esq. Brown Rudnick LLP Counsel for Defendants Robert Stolzman and Adler, Pollock & Sheehan, P.C.
David P. Martland, Esq. Silva, Thomas, Martland & Offenberg, Ltd. Counsel for Defendant Keith Stokes
David A. Grossbaum, Esq. Hinshaw & Culbertson LLP Counsel for Defendants Antonio Afonso, Jr. and Moses Afonso Ryan, Ltd.
Samuel C. Bodurtha, Esq. Hinshaw & Culbertson LLP Counsel for Defendants Antonio Afonso, Jr. and Moses Afonso Ryan, Ltd.
Matthew R. Watson, Esq. Hinshaw & Culbertson LLP Counsel for Defendants Antonio Afonso, Jr. and Moses Afonso Ryan, Ltd.
Brooks R. Magratten, Esq. Pierce Atwood LLP Counsel for Defendant Barclays Capital, Inc.
Jeffrey C. Schreck, Esq. Counsel for Defendants Richard Wester, Thomas Zaccagnino, Curt Schilling, and Jennifer MacLean
Michael F. Connolly, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Counsel for Defendants Richard Wester and Thomas Zaccagnino
Joseph P. Curtin, Esq. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Counsel for Defendants Richard Wester and Thomas Zaccagnino Counsel for Defendants Richard Wester and
Thomas Zaccagnino Michael P. Duffy, Esq. Peabody & Arnold LLP Counsel for Defendant Starr Indemnity and Liability Co.
Frederick E. Connelly, Jr., Esq. Peabody & Arnold LLP Counsel for Defendant Starr Indemnity and Liability Co.
Christopher R. Conroy, Esq. Peabody & Arnold LLP Counsel for Defendant Starr Indemnity and Liability Co.
Bruce W. Gladstone, Esq. Cameron & Mittleman LLP Counsel for Defendant J. Michael Saul
Mark A. Berthiaume, Esq. Greenberg Traurig Counsel for Defendant Jennifer MacLean
Jonathan Bell, Esq. Greenberg Traurig Counsel for Defendant Jennifer MacLean
Timothy E. Maguire, Esq. Greenberg Traurig Counsel for Defendant Jennifer MacLean
Carl E. Metzger, Esq. Goodwin Procter LLP Counsel for Defendant Curt Schilling
Sarah Heaton Concannon, Esq. Goodwin Procter LLP Counsel for Defendant Curt Schilling
Josh L. Launer, Esq. Goodwin Procter LLP Counsel for Defendant Curt Schilling
Thomas E. Duncombe, Esq. Goodwin Procter LLP Counsel for Defendant Curt Schilling
DECISION
SILVERSTEIN, J.
Before the Court for decision is Plaintiff's motion seeking to overrule objections by and to compel Defendant Stolzman to answer Plaintiff's Interrogatory No. 1. The present motion seeks to require Defendant to disclose the amount of coverage presently available under Defendant's insurance policy. This Defendant in his original response stated:
"The policy limits of coverage available for the claim are $20,000,000. Defense fees and costs incurred beyond the applicable self-insured retention reduce the available policy limits. The amount of coverage currently remaining and the balance of unpaid defense costs are not subject to disclosure per the attorney-client privilege and pursuant to the protections afforded attorney work-product."
Having reviewed the arguments advanced by Plaintiff and by Defendant, this Court fails to find that either of the well-recognized privileges referred to in the response by Defendant Stolzman are implicated. Plaintiff here seeks information as to: (1) the amount of coverage currently remaining under the applicable insurance policy; and (2) the gross amount of unpaid costs including legal fees which would further reduce the remaining amount of coverage and also the name of the insurer.
Plaintiff does not seek protected attorney-client communications, work-product incident to the litigation, or copies of any bills representing work performed by counsel or otherwise.
This determination, however, is not the end of the inquiry. Rule 26(b)(2) of our Rules of Civil Procedure dealing with the scope of discovery provides that "a party may obtain discovery of the existence and contents of any insurance agreement under which any person carrying on an insurance business may be liable to satisfy part or all of a judgment . . ." Here, Plaintiff has received the response from Defendant Stolzman quoted above. Defendant's answer discloses that the policy is of a nature sometimes described as a wasting policy or a cannibalizing policy. That is to say that, whatever the policy limits were when issued, they are subject to reduction predicated on other claims asserted with respect to the policy and/or the costs incurred in defending claims made under the policy. The Court is not unaware of a controversy with respect to the interpretation of rules in effect in other jurisdictions with respect to the subject matter herein implicated. Our Court heretofore has not been called upon to rule directly on the issue at bar. The Court notes that in their book, Rhode Island's Civil and Appellate Practice, Section 26.4, the authors Kent, Simpson, Flanders and Wollin state that the purpose of the rule is " . . . to enable a party to evaluate the advisability of making or accepting an offer of settlement." In many instances, a party would make, accept or reject a settlement proposal only if the party were aware of the magnitude of available proceeds from an insurer. Lack of that information, this Court holds, would inhibit the likelihood of settlement and thwart the purpose for the rule suggested by the authors.
As indicated above, our Court has not directly had occasion to rule in connection with this issue; however, this Court does note that State v. Lead Indus., Ass'n, 64 A.3d 1183, 1198-99 (R.I. 2013) seems to suggest that had the specific information as to the existing remaining amount of insurance coverage been the subject of discovery, it might have been an appropriate inquiry.
In any event, and in order to effectuate the purpose of the rule as suggested by Messrs. Kent, et al., information as to the present magnitude of available insurance coverage is, in the opinion of this Court, critical and is within the contemplation of the rule. The argument advanced by Defendants to the effect that the cases that permit and require the disclosure of such information invariably are limited to instances where third-party claims are involved as to the same policy, and that this is not such a case, are rejected by this Court. The question is what difference does it make as to whether the policy is being depleted by claims of others or if the depletion is occurring as a result of the costs of defending against the claim asserted by Plaintiff. In either event, the amount of insurance coverage available to a defendant would assist a plaintiff in determining whether to make or to accept a settlement offer/demand is the same.
Predicated on the foregoing, Defendant Stolzman is ordered, within ten days of the entry of an order consistent herewith, to provide a further response to Interrogatory No. 1.
Prevailing counsel shall present an order which will require inter alia that whatever information is provided by Defendant Stolzman is subject to the March 2013 confidentiality order heretofore entered by this Court. Further, Defendant Stolzman is not required, except in compliance with further orders of this Court, to further update his answer to Interrogatory No. 1.